Banks in the Diamond-Dybvig model can offer depositors increased liquidity because
A) both individual depositors' liquidity needs and average depositor liquidity needs are predictable.
B) while individual depositors' liquidity needs are unpredictable, average depositor liquidity needs are predictable.
C) while individual depositors' liquidity needs are predictable, average depositor liquidity needs are unpredictable.
D) neither individual depositors' liquidity needs nor average depositor liquidity needs are predictable.
Correct Answer:
Verified
Q37: A key property of a Diamond-Dybvig bank
Q38: In the monetary intertemporal model,the long-run effects
Q39: If money is superneutral,
A) a one-time change
Q40: An asset's liquidity depends upon
A) the absolute
Q41: Moral hazard is a problem in providing
Q42: The Diamond-Dybvig model provides a rationale for
Q43: In the United States,the Federal Deposit Insurance
Q44: The phenomenon in which an insured individual
Q46: The belief that the regulators of the
Q47: The founding of the U.S. FDIC was
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents